In a Periodic Inventory System a Return of Defective Merchandise

question 49

Multiple Choice

In a periodic inventory system a return of defective merchandise to a supplier is recorded by crediting

• A) Accounts Payable.
• B) Inventory.
• C) Purchases.
• D) Purchase Returns and Allowances.

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Definitions:

Cost Method

An accounting method used to value investments, where the investment is recorded at cost and adjustments are made for dividends received or additional investments made.

Significant Influence

The power to participate in the financial and operating policy decisions of an investee but not control those policies.

Cost Method

An accounting method used to value an investment, based on the cost to acquire the asset, without recognizing post-purchase market changes.

Dividends

Payments made by a corporation to its shareholder members, usually derived from profits.